On May 19, 2026, President Trump signed an executive order titled “Restoring Integrity to America’s Financial System,” requiring banks to treat a customer’s immigration status as a factor in evaluating potential financial risk. The order does not impose a blanket mandate to collect citizenship information, but instead directs Treasury and federal banking regulators to issue guidance on how banks should identify and assess immigration-related risk in account-opening, lending, and credit decisions. If you represent clients with uncertain immigration status—DACA recipients, TPS holders, ITIN filers, or undocumented immigrants—this policy shift will reshape your financial advisory strategy.
What changed
The executive order directs the Treasury Secretary and federal financial regulators to issue guidance to banks on identifying customers whose profiles or transactions potentially indicate risks like money laundering, terrorism financing, and labor trafficking in line with the 1970 Bank Secrecy Act. Rather than a blanket citizenship collection requirement, the order contemplates a risk-based approach under which immigration status information may be sought when other risk indicators are present.
The order directs the Treasury Department to issue formal advisories to financial institutions outlining “red flags” to watch for, including payroll tax evasion, attempts to conceal identity, the “strategic use” of unregistered money services businesses or third-party payment platforms, labor trafficking or forced labor and the use of individual taxpayer identification numbers to obtain credit or open accounts.
The order sets specific timelines:
- Within 60 days (by mid-July 2026), Treasury must issue a formal advisory to financial institutions describing specific “red flags and typologies” of suspicious activity.
- Within 90 days (by mid-August 2026), the Treasury Secretary, in consultation with federal financial regulators, must propose changes to BSA regulations to strengthen risk-based customer due diligence requirements.
- Within 180 days (by mid-November 2026), Treasury and federal financial regulators must consider changes to BSA regulations to strengthen risk-based customer identification program requirements.
Why it matters
This order creates real-world risk for your undocumented and quasi-status clients. While the text stops short of mandating that banks collect proof of citizenship or lawful status, industry lawyers say the practical effect will be new ‘know-your-customer’ questionnaires asking whether applicants are U.S. citizens. Clients will face questions about work authorization, employment, and immigration history during account-opening and loan underwriting.
For clients filing family-based or employment-based petitions, this creates a convergence problem: the asset documentation you need to support an I-864 affidavit of support, fee payment for an I-485, or loan co-signing may now trigger bank scrutiny. A client with an ITIN or foreign passport may see:
- Account applications denied or delayed pending citizenship verification
- Existing accounts flagged for “suspicious activity” reports (SARs)
- Loan denials even with good credit (ITIN borrowers face bank reluctance already; this order intensifies it)
- Pressure to move assets to unregulated money services or foreign transfers—exactly the “red flag” behavior the order is designed to catch
Tax experts said immigrants brought to the U.S. illegally by their parents as children (DACA), and immigrants with Temporary Protected Status would be largely affected by the planned change.
Way forward
1. Advise clients on the new banking environment now
- Brief ITIN-holders, TPS recipients, and DACA clients that banks are increasing scrutiny of immigration status and work authorization.
- Counsel them to gather and keep available proof of legal status, DACA authorization documents, or EAD if they have one.
- For undocumented clients, discuss the risks of account applications and suggest they consolidate accounts now before Treasury guidance makes it harder to open new ones.
2. Adjust fee-payment and asset-documentation strategies
- For I-485 and I-864 filings, do not assume ITIN-based accounts will remain stable through adjudication.
- Consider fee payment and asset verification while accounts are still secure; do not defer to the final interview stage.
- For co-signed affidavits of support, verify that the co-signer’s bank account will not face closure during the petition pendency.
3. Monitor the Treasury Advisory (due mid-July 2026)
- The Treasury secretary must issue a formal advisory to financial institutions identifying red flags and suspicious activity patterns tied to illegal immigration and bad actors.
- When released, review the specific red flags and “typologies” Treasury publishes; they will define how banks interpret this order in practice.
- Use the advisory to inform client conversations about which account behaviors (large withdrawals, wire transfers, third-party deposits) might trigger scrutiny.
4. Stay alert to final BSA rule proposals (due mid-August and mid-November 2026)
- Federal regulators will propose specific regulatory changes to “strengthen risk-based customer identification” and account opening procedures.
- These rules may become binding on banks and could lock in new identity-verification and immigration-status questions as standard practice.
- Subscribe to Federal Register notices and banking regulatory updates so you can advise clients of the final rules’ impact before they take effect.
Disclaimer
This article is provided for informational purposes only and is not legal advice. It does not constitute an attorney-client relationship. Immigration and banking law are complex; immigration policy can change without notice; and the guidance Treasury will issue in coming months may modify or expand the order’s effect. You should verify all information against the primary source linked above and consult a licensed attorney regarding your specific client’s circumstances and financial strategy.